Hurdles of Running Private blockchains: Why Consulting Firms Might Fall Short?

Blockchain’s adoption is gathering huge steam, expanding its implementation from an emerging concept to seeing a full-scale adoption for institutional applications. Now that enterprises have realized the true potential of blockchain-powered solutions, there’s a sharp rise in private blockchains.

By private, we refer to the chains that keep their data fully private and allow access to only authorized participants. These are different from permissioned chains, where data is public but accessibility is granted to only verified participants. As required, projects can build private blockchains or private rollups. Private blockchains can be built with Layer0 protocols and appchain frameworks, while private rollups can be built with ZK Rollups stack. Speaking about Optimistic rollups stack, they are designed to support development of permissioned chains due to their open nature. 

With rapid development of private chains, more blockchain consulting firms are offering their specialized services. However, if we look at private blockchains, their conceptualization, protocol-level configuration, and design implementations are different. A consulting company with a major focus on building cutting-edge solutions may fall short at various levels. Blockchain infrastructure providers, due to their intense specialization in launch, management, and scaling of L1/L3 chains, can be a good alternative. 

In this article, we will discuss the major pitfalls and challenges enterprises or web3 projects can face while running & managing their solution through consulting companies. Also, we will understand how managed infrastructure services can assist private chains. 

A brief about private blockchains: How they are rising in demand?

As you may know, blockchain works with a distributed ledger where information is shared with all the parties. However, this feature is not suitable for enterprises that want to conceal their data and ensure privacy. And, that’s where private blockchains help.

Private blockchains are designed to offer enterprises complete data privacy while allowing for desired accessibility controls. Enterprises choosing to build private blockchain can set-up their multi-party business and retain their control on the network.  Some of the leading private blockchain protocols are Hyperledger Besu, Avalanche, Cosmos, Polkadot and R3 Corda. Also, there are rollups frameworks that enable development of private rollup chains, example- Polygon CDK and ZK Stack. Learn more about private blockchains from our detailed article:  Why is Private Blockchain Network suitable for Enterprises?

What are blockchain consulting companies?

Blockchain consulting companies help enterprises identify the areas of blockchain application to streamline their business operations through decentralized solutions. These companies are responsible for strategy assessment, prototyping, solution development, implementation, and additional customization. These firms also take the accountability to handle blockchain networks and underlying ecosystems to ensure performance and efficiency.

Running private blockchain: Where consulting companies might face issues?

1- Use case-specific protocol selection: 

As discussed, there are a wide range of private blockchain protocols available for projects to build upon. Each comes with its unique features and capabilities to support application-specific requirements. And, as we know, every use case demands the right set of protocol and specific configurations to be in place. 

For example, if your private blockchain looks for fast interactions and composable scalability, then Layer0 kind of appchain protocols like Hyperledger Besu, Polkadot, Cosmos SDK, and Avalanche can be the ideal selection. Whereas, if you want to leverage off-scaling mechanisms to ensure massive throughput and Ethereum-based security, then zero-knowledge based rollup protocols like Polygon CDK or ZKsync ZK Stack are the recommended solutions.

The right way is to explore comprehensive options and then decide which is perfect. However, consulting companies might not fully accommodate the level selection and specialization you need.  That’s because consulting firms or system integrators do not offer wide coverage of all the protocols and framework; their list is often limited to the leading or highly-adopted protocols.

2- Achieving protocol-level specialization: 

Blockchain consulting companies lack extensive protocol-level specialization, which is one of the important aspects of building full-fledged private blockchain networks. These companies are more focused on the  development side, and hence they are very good at building solutions with next-level configurations, design, and all, while they struggle to offer top-notch infrastructure services like:

• Benchmarked setups (for nodes, storage system, smart contract platform, APIs, etc). 
• Decentralized & fully flexible setups for on-demand scaling.
• 24/7 support & maintenance to maintain performance,
• Smart monitoring & alert system for top-notch infrastructure management.
• Production-grade SLAs for the core protocol itself. 

3. Proficiency in protocol engineering : 

Private blockchains are designed specifically to serve the unique requirements of enterprises. They might therefore require plenty of customizations and configurations at the protocol level, apart from the core infrastructure. For example, you might not be satisfied with the standard configurations and features of Polygon CDK or you want entirely different values and services from its native offerings. 

While this is possible due to the open-source nature of private blockchain protocols like Hyperledger Besu, Avalanche, Polkadot, and rollups framework like Polygon CDK and ZK Stack– blockchain consulting companies struggle to offer such extensive protocol-level engineering services.  Which means, a private chain might face challenges to experiment and make changes in the protocol itself, building a private chain custom-fitted to their needs. 

4. Limited partnerships & 3rd party integration options:

Blockchain consulting companies currently do not focus much on establishing close partnerships with various protocols and also with third-party service providers. Hence, they have limited access to protocols and external services or they remain tied to their proprietary services and solutions, creating the situation of vendor lock-in.

On the flip side, a typical private blockchain,  be it an application-specific or a general-purpose chain, requires a number of additional components in place besides the core network infrastructure. For example, your private chain might need account abstraction services, decentralized oracles, MPC wallets, interoperability layer, sequencer, explorer, staking interface, and so on. This lack of service penetration and integration limits innovations in private blockchains, which directly impacts its usage and adoption. 

Likewise, close partnerships with protocols is vital. This allows support to be channeled in a more efficient way. So, if there’s any crucial update or changes in the protocol, private chains can immediately adapt the change and work seamlessly. 

5. Support for sophisticated solutions: 

A lot of private chains today design their network to power very sophisticated solutions. These solutions are based on a complex network architecture in which the technical and functional aspects are the same. Hence, it is difficult for a consulting company to consult upon.  The major reason behind this is the requirement to analyze and utilize the technical offerings of a protocol like Hyperledger Besu, Arbitrum Orbit, Polygon CDK, Avalanche HyperSDK, etc. This protocol-level consultation is something where consulting companies might be lagging. 

An example of this can be DePIN solutions where a lot of services need to be very much aligned with the protocol or it may require protocol-level customization. Maintaining a DePin solution, its economics, and core network will be a challenge if there’s lack of protocol-level connectivity. 

Solution to above challenges: Specialized Infrastructure providers 

Specialized infrastructure providers like Zeeve offer services for the launch and management of private blockchain networks, eliminating all the challenges facing blockchain consulting companies. This enables projects to focus on building their solution while their underlying infrastructure is managed efficiently. 

• Support for diverse protocols-  Blockchain infrastructure providers focus significantly on adding support to all the leading blockchains, whether private or public. Their support enables private chains to choose from a diverse range of private blockchain protocols, from appchain solutions like Cosmos SDK and Hyperledger Besu to rollup-based private chains like ZK Stack, Polygon CDK, Scroll, etc.
• Extensive protocol specialization– Managed infrastructure services are specialized in protocols and its various aspects, which enables private chains to customize their network easily on both the development and the protocol-level. This means, you can not just modify the features or the business logic, instead you have the flexibility to change the protocol itself and utilize it for your use-case purpose.

• Top-level infra management: A trusted blockchain infrastructure provider abides by the top-level infrastructure management parameters such as auto-scaling nodes, robust network monitoring system, necessary Enterprise SLAs, and compliance with security standards like ISO 27001, SOC 2 Type 2 & GDPR. This ensures the exceptional performance of private chains with Ethereum-level security, uptime, and availability.
• A rich ecosystem of protocol partnerships & integrations: Managed infrastructure providers continue to forge partnerships with leading protocols, and meanwhile, they add support for all the third-party integrations that are useful for building private blockchains. The partnership allows infra providers to stay updated with everything that’s happening on the protocol level (upgrades, changes in policy, feature enhancement, etc.), whereas integration enables the development of future-proof modular chains. 
• Support for tools and frameworks: Working with blockchain infrastructure providers allows private chains to access a set of tools and frameworks needed to design complex networks and further maintain them. For example, you can expect to get in-house tools like customizable block explorers, data indexers, wallets, token faucets, rollup sequencers, and more.

Manage your private blockchain efficiently with Zeeve 

Zeeve offers a fully managed infrastructure to ensure the availability and uptime of your private chain. Whether you want to launch a private blockchain or you seek to build a rollup-based private chain, Zeeve offers support to all kinds of projects. Having formed strategic partnerships with leading protocols like Polygon, ZKsync, Hyperledger foundation, Avalanche, Cosmos, along with 40+ external integrations, Zeeve allows private chains to achieve desired modularity. 

Additionally, you can access essential tools like block explorers, wallets, crypto gateways, bridges, and a range of pluggable tools to set up and operate your chain. For more information about Zeeve’s blockchain and rollups offerings, connect with our experts. Send all your queries via mail or schedule a call for detailed discussion.